European stocks and the euro were under pressure on Tuesday after a euro zone plan to boost crisis funds parked with the IMF failed to reach a hoped-for target, though looming ECB funding for the region's banks lifted sentiment in some bond markets.

The euro hovered around $1.3010 on Tuesday, slightly up on the day and off Monday's low of around $1.2983. It hit an 11-month low of $1.2944 last week.

Concerns about the European situation will keep the euro under pressure even if it manages short-term rises, said Sumino Kamei, a senior currency analyst at Bank of Tokyo-Mitsubishi UFJ.

European shares <.FTEU3> extended a two-week slide to be down around 0.3 percent while MSCI's world equity index <.MIWD00000PUS> was little changed.

Euro zone ministers agreed on Monday to boost the IMF's resources by 150 billion euros (126 billion pounds) to help tackle the region's two-year old debt crisis, but it was unclear if the bloc would reach its overall 200 billion euro target after Britain bowed out. This has created doubts about whether the scheme would work with London, Washington and Germany's Bundesbank unenthusiastic.

The increase in the IMF resources was seen as a vital part of Europe's steps to prevent the debt crisis from spinning out of control given worries that the region's scheduled permanent bailout fund is too small to handle the debt problems.

Attention is gradually switching to Wednesday's first offering by the European Central Bank of low-cost, three-year funds to the region's banks, which some hope will encourage them to buy high-yielding Spanish and Italian bonds while other believe will be used instead to repair their balance sheets.

A Reuters poll showed euro zone banks were expected to snap up 250 billion euros at the tender, although forecasts ranged from 50 to 450 billion euros, indicating a high degree of uncertainty.

Earlier the mood in Asian markets was still risk-averse, after the death of North Korean leader Kim Jong-il raised fears of regional instability, though share market recovered much of Monday's losses.

Tokyo's Nikkei share average <.N225> ended up 0.5 percent, moving away from Monday's three-week low<.T>, while South Korea's benchmark index <.KS11> outperformed with a 0.7 percent rise, after plunging as much as 5 percent on news of Kim's death. <.KS11>

Market players said thin pre-holiday trade may exaggerate price swings, but further heavy selling was unlikely until there was another catalyst, such as European sovereign ratings cuts.

In the oil market Brent crude futures rose above $104 on Tuesday, buoyed by the risk of supply being disrupted from Central Asian oil producer Kazakhstan, even as sanctions-hit Iran struggles to maintain its production and Libyan output is delayed.

(Additional reporting by Chikako Mogi)